Report: Global stability enters ‘gray‑zone’ era as businesses face new class of geopolitical risk

Global stability is entering a new phase defined less by formal declarations of war and more by ambiguous, deniable and strategically choreographed tactics that sit between peace and armed conflict, or so-called “gray-zone aggression,” according to a report from the Willis Research Network and Elisabeth Braw, a senior fellow with the Atlantic Council.

According to the report, gray-zone aggression has rapidly evolved into a material threat for businesses, disrupting markets, undermining confidence and creating political leverage.

Five years ago, these tactics barely featured on corporate risk registers and were largely seen as concerns for aviation and shipping. Today, they are shaping geopolitical risk appetite, testing insurance policy wordings and resilience strategies across sectors including energy, technology, logistics and finance, according to the report. 

In Willis Towers Watson’s 2025 Political Risk Survey, 77% of executives cited economic retaliation as the most concerning gray‑zone method, 64% highlighted state‑sponsored cyber activity and 44% pointed to attacks on infrastructure.

The report, titled Hidden threats, real impacts: gray‑zone aggression, argued that in this environment, the private sector is no longer a bystander. Organizations are urged to anticipate, adapt and collaborate to strengthen corporate defences and maintain business continuity.

In Willis Towers Watson’s 2025 Political Risk Survey, 77% of executives cited economic retaliation as the most concerning gray‑zone method, 64% highlighted state‑sponsored cyber activity and 44% pointed to attacks on infrastructure.

Gray‑zone tactics in practice

Braw’s work on hybrid and gray‑zone threats describes such aggression as hostile acts outside the realm of armed conflict, used to weaken a rival country, company or alliance through economic, technological and reputational pressure rather than direct military force.

Recent incidents underline the trend. The 2022 sabotage of the Nord Stream gas pipelines in the Baltic Sea – widely attributed to explosive devices placed on the seabed – caused multi‑billion‑euro infrastructure damage, triggered a 12% spike in European gas prices and left insurers facing complex questions over war, terrorism and sabotage exclusions.

In March 2025, suspected sabotage of subsea power cables in the Gulf of Finland again highlighted how easy it can be to damage critical interconnectors and how difficult and costly they are to repair, with individual outages costing tens of millions of euros and taking many months to fix.

For marine and energy insurers, gray‑zone tactics also intersect with sanctions and compliance. A 2025 investigation by The Times showed how UK‑based P&I clubs were drawn into a sanctions “gray zone” when tankers they insured were later alleged to have carried Iranian oil, illustrating the difficulties of monitoring ship‑to‑ship transfers, transponder shutdowns and complex ownership structures.

Pressure on insurance wordings and capacity

For insurers and brokers, a central challenge is that many gray‑zone tactics fall into areas which traditional policy wordings were not designed to address. Braw has previously warned that these new forms of aggression “are not included by name in any insurance policy”, raising the risk that incidents fall between war, terrorism, cyber and political risk definitions.

The Willis Research Network report’s call to re‑evaluate insurance wordings, triggers and limits reflects wider market adjustments. In marine and offshore energy, specialist clauses and stand‑alone covers are increasingly being used to ring‑fence war, terrorism and sabotage perils around subsea infrastructure, while reinsurers scrutinise how far they are willing to extend cover for state‑linked attacks. In parallel, cyber insurers and Lloyd’s syndicates have moved to tighten cyber war and state‑backed cyber‑operations exclusions, amid concern that gray‑zone attacks could generate systemic losses.

For corporate insurance buyers, this raises practical issues around silent exposures, overlapping exclusions and aggregation. Risk and insurance managers are being encouraged to undertake cross‑programme reviews – spanning property, cyber, marine, political risk, trade credit and D&O – to understand how a single gray‑zone incident could play out across multiple policies and layers of cover.

Enterprise‑level risk, supply chains and crisis response

The Willis report also urged boards and chief risk officers to treat gray‑zone aggression as an explicit enterprise‑level risk rather than a subset of traditional political risk. It highlighted the need to embed continuous geopolitical monitoring, structured scenario exercises and dedicated escalation pathways into existing risk governance.

Supply chains are a particular focus. Complex, just‑in‑time networks mean a single chokepoint – such as a key strait, rail hub or critical supplier – can generate outsized ripple effects. The report argued that diversification, route alternatives and “friendshoring” of key inputs should be integrated into both operational and financial planning, not treated solely as a procurement issue.

Implications for P&C, specialty and reinsurance markets

The report underlined that gray‑zone aggression is no longer a niche security topic but a driver of underwriting strategy, product design and capital management. In the P&I and marine markets, for example, 2026 renewals have already seen a tougher stance on general increases – averaging around 6% across International Group clubs, with many also pushing for higher deductibles – as clubs respond to economic volatility and the prospect of larger, more complex claims.

Regulators are also paying closer attention to how non‑traditional carriers support higher‑risk activity, such as “shadow fleet” tankers moving sanctioned oil. The UAE, for instance, has tightened requirements for non‑International Group P&I providers insuring UAE‑flagged ships, demanding strong credit ratings and evidence of claims‑paying ability amid concerns over whether such insurers could respond adequately to a major loss.

Calls for action from political risk and security experts

“Today’s gray-zone tactics exploit the way our economies are connected – and that puts the private sector directly in the line of fire. Hostile countries are targeting companies precisely because doing so creates disruption and uncertainty while at the same time having two distinct advantages: plausible deniability and minimal risk of retaliation,” Elisabeth Braw, senior fellow of Atlantic Council, said. “This research makes clear that treating gray-zone aggression as a temporary nuisance is a mistake. Organizations that fail to recognize gray-zone activity as a material business risk will find themselves reacting too late, with real consequences for business operations, confidence and resilience.”